In today’s constantly changing business landscape, revenue is the lifeblood that keeps all companies functioning.

To truly thrive, however, businesses must optimize revenue growth and understand how to improve performance. This is where revenue operations metrics come into play.

This article will focus on everything RevOps metrics, exploring their importance and how businesses and RevOps professionals can use them to drive growth and success.

We’ll take a look at: 👇

Why are metrics essential to revenue operations?

First of all, what are RevOps metrics?

Revenue Operations metrics are the measurements used to evaluate successful growth and the effectiveness of revenue operations strategies.

As RevOps work across departments to gather data and streamline revenue-growth strategies, measuring just revenue isn’t enough, you have to look further!

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Taking into account the metrics that apply to each different team creates a fuller picture of how the business is operating.

Then, by using these metrics to track and analyze performance, businesses can gain important insights and identify growth opportunities, staying ahead of the competition.

'Understanding how different changes across departments impact revenue is crucial to measuring actual growth, as it can show exactly what works and what doesn't'

How do RevOps professionals use metrics and how can they help your team?

In a panel discussion held by our sister community, Sales Enablement Collective, Rosalyn Santa Elena (Vice President, Global Revenue Operations, Neo4j) told us that:

‘When it comes to data, RevOps really helps to ensure that it’s accurate, comprehensive, and available to the right people at the right time … that's how we build that successful, repeatable revenue engine that we all want.’

RevOps professionals, using these metrics and data, can build actionable strategies that keep the revenue engine driving ahead.

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Monitoring Revenue Operations metrics, these professionals can identify any areas for improvement, track where the RevOps process has been successful and ultimately make decisions for how to reach business goals.

Understanding how different changes across departments impact revenue is crucial to measuring actual growth, as it can show exactly what works and what doesn't.

The most important metrics for RevOps:

Let’s look at the most important metrics your RevOps team should be tracking 👇

Sales forecasting

A metric that often gets missed off of ‘key metrics’ lists, sales forecasting is estimating future revenue over a certain period.

The RevOps framework integrates the sales forecasting data shared by the sales team, monitoring these metrics to identify any inaccuracies and communicating effectively, using the numerical data to deliver a confident forecast.

By optimizing the work of the RevOps team, you can help grow business and focus on driving revenue.

Customer Acquisition Cost (CAC)

Customer acquisition cost or CAC is the total cost spent on acquiring a new customer.

As a business, you’re always looking for new ways to attain customers, running various sales and marketing strategies to attract the right customers from your target audience.

These costs are a necessary part of business and revenue growth, but a high CAC will cut into profits too much.

Looking at customer acquisition costs as a metric, will ensure that the RevOps team work with the marketing team to develop a strategy to align marketing and sales, more efficiently identifying the target audience.

Using this metric and RevOps alignment will also help companies to make better spending decisions, understanding which marketing tactics are keeping customers coming back and which are turning them towards competitors.

Customer Lifetime Value (CLTV)

Customer lifetime value or CLTV is a metric that calculates the total value a customer is expected to bring to the company throughout their relationship with you.

By understanding CLTV, businesses can identify where there may be opportunities to drive revenue growth, expanding the value of existing customers.

Ultimately, retaining customers is more time and cost-effective than earning new ones, CLTV can also highlight areas for improvement in customer relationships.

This metric data provides the opportunity to increase customer loyalty and encourage future customer advocacy, which in turn, further generates revenue.

Sales pipeline velocity

Sales pipeline velocity refers to the rate at which opportunities and leads move through the sales process of a company, from initial contact to closing the deal.

By comparing the total value of the closed deals, to the time it took to close the deals, you can calculate the velocity of your sales pipeline.

A faster sales pipeline velocity indicates that your company is winning leads and closing deals more quickly, showing your sales process to be efficiently structured.

Since your sales cycle is now shorter, you have increased the opportunities for acquiring new leads due to the accelerated turnover.

In the same way, if the rate of moving leads is slow, it highlights issues in your company’s sales pipeline. This is where RevOps metrics step in.

By streamlining data from all departments, RevOps has a birds-eye view of the sales process and can identify more quickly the cause of the underlying problem.

Using RevOps metrics to calculate sales pipeline velocity means you can better understand the rate of your sales process and direct focus to the driving of revenue growth.

Customer churn rate

Customer churn rate quite simply refers to the rate at which customers are leaving the company.

This metric tracks the percentage of customers who have discontinued using your product or service within a specific period.

No company wants to think about losing its customers, but it’s crucial to measure the rate at which these customers are leaving as the higher the churn rate, the less profitable you become.

33% of Americans say they’ll consider switching companies after just a single instance of bad service and this can be easily avoided by adopting a RevOps approach.

Analyzing customer churn rate sees measures taken quickly and proactively, to calculate this you can use the formula: (Lost customers ÷ Total customers at the start of the time period) x 100.

This strategy prioritizes customer retention, focusing on customer service and success and addressing any questions promptly at all stages of the customer journey.

Arguably more important than customer acquisition, customer retention increases profitability, decreases churn rate, and drives revenue growth.

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Conversion rate

Now for the final key RevOps metric, conversion rate. This measurement is the percentage of leads that become paying customers.

The higher the conversion rate of your company, the more effective your marketing and sales tactics are shown to be, but a low conversion rate shows that something is going wrong.

A low conversion rate can signal several things, unsuccessful marketing strategies or targeting the wrong audience to name a few.

Whatever the reason, RevOps can identify it, helping to reconnect the sales and marketing teams and establish goals and strategies to increase the conversion rate and quality of leads.

Final thoughts

Revenue Operations metrics are crucial to driving business growth and success because they provide key insights into a company’s revenue-generating as a whole.

Analyzing the metrics discussed here can help your company identify areas for growth, understand the effectiveness of various strategies, and pinpoint problem areas quickly.

There’s a lot of information in the article you’ve just read, so how about we take a note from RevOps and streamline the key points even further.

You can break the most important RevOps metrics into 4 key ideas: value, volume, velocity, and conversion rates. A change in any of these = a change to revenue.

Using these measurements and monitoring revenue operations metrics will prove essential, optimizing and maximizing revenue and staying ahead of the competition.

Prove the ROI of your revenue operations efforts with our RevOps Metrics Playbook. Get your copy! 👇